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Timberline Resources Corp
Symbol TBR
Shares Issued 75,164,082
Close 2014-09-24 C$ 0.07
Market Cap C$ 5,261,486
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Timberline JV to add more monitoring wells to Butte

2014-09-25 08:35 ET - News Release

Mr. Paul Dircksen reports

TIMBERLINE REPORTS PERMITTING PROGRESS AT BUTTE HIGHLANDS GOLD PROJECT IN MONTANA

The Montana Department of Environmental Quality (MDEQ) has made progress toward completion of the final environmental impact statement for Timberline Resources Corp.'s Butte Highlands gold project. Two key mitigation issues on Fish Creek and Basin Creek have been addressed.

Montana Fish, Wildlife & Parks (MFWP) has responded to the MDEQ regarding mitigations proposed by Butte Highlands JV LLC (BHJV) to address potential impacts to fishery resources near the proposed underground mine at the Butte Highlands gold project. MFWP expressed initial concerns, in comments on the draft environmental impact statement (draft EIS) as published in October, 2013, of potential impacts to groundwater and adjacent creeks resulting from dewatering of the proposed mine, and from termination of flow to Basin Creek resulting from closure of the historic mine portal.

MDEQ released a letter dated Sept. 16, 2014, in which MFWP notes that "with the purported mitigation approaches and the intensive monitoring planned, we believe that the risks are low and manageable as proposed." BHJV, the operator of the project, has proposed additional water monitoring at strategic sites as indicators of potential groundwater and surface water impacts. Mitigation measures have been developed in consultation with the MDEQ and in consideration of the interests of the consolidated City and County government of Butte-Silver Bow (BSB).

BHJV has agreed to install three additional monitoring wells for collection of data to provide early warning indication of potential groundwater level decreases and associated stream flow reductions in Fish Creek due to mine dewatering. To support the proposed mitigation, BSB approved a memorandum of understanding (MOU) on Sept. 24, 2014, wherein BSB has agreed that if flow reductions are recognized, BHJV will purchase water from BSB for flow augmentation. As necessary, flow will be released from a nearby aqueduct operated by BSB to sustain fish habitats in Fish Creek. The flow augmentation could be required for up to a seven- to eight-year period before the water table rebounds to its premining level.

MFWP has also proposed mitigation for anticipated impacts resulting from closure of the historic mine portal and the elimination of the existing water discharge to nearby Basin Creek. MFWP has proposed compensation for impacts through trout habitat restoration in nearby Blacktail Creek. MFWP has also recognized that plugging of the historic mine portal will likely result in increased postmining groundwater elevations and enhanced spring development which will support stream flows in each nearby basin.

The United States Forest Service (USFS) has hired Hydro Solutions Inc. (HSI) as an independent contractor to assist with completion of the final environmental assessment (EA) for mineralized material haulage across the Beaverhead-Deer Lodge National Forest. HSI is the same contractor employed by the MDEQ for completion of the final EIS, so improved co-ordination between agencies is expected.

The company was also notified that BSB has signed an MOU with BHJV wherein BSB will pursue a Federal Road and Trails Act (FRTA) easement with the USFS for portions of the Highland Road which is expected to be used by BHJV for material haulage. The easement will allow transfer of road jurisdiction to BSB, which also agreed in the MOU to enter a road use agreement with BHJV. The agreement will govern the terms of use of the Highlands Road for mining activities.

The company anticipates more information from the MDEQ and the USFS regarding a revised schedule within the next few weeks.

Timberline's president and chief executive officer, Paul Dircksen, commented: "These letters and agreements are positive, tangible evidence of the progress that is being made toward obtaining the necessary permits for underground gold mining at the Butte Highlands gold project. This has been a difficult and arduous process, but we are pleased that the work of our team and the regulators on behalf of BHJV is showing advancement toward our ultimate objective."

Timberline owns a 50-per-cent carried-to-production interest in BHJV, which owns the Butte Highlands gold project, located approximately 15 miles south of Butte, Mont., where mining is expected to commence following the issuance of the final hard rock operating permit and the USFS approval of a road-use plan of operations for material haulage. The project is located within a favourable geologic domain that has hosted several world-class, multimillion-ounce gold deposits including Butte, Golden Sunlight, Montana Tunnels and Virginia City.

Timberline's joint venture partner has and is expected to continue to finance all mine development costs through to commercial production with Timberline's share of those costs to be repaid from proceeds of future mine production. The Butte Highlands gold project is an example of Timberline's strategy to participate in gold production through creative management and financial structures. The company expects to benefit from production without assuming the development risk and without dilutive equity financing or burdensome debt financing that would have been required if the company had financed the development.

We seek Safe Harbor.

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